Searching For Easy Street Limousine Services Finding Many Roadblocks In Their Race For A Profit

July 15, 1985|By Joe Kilsheimer of The Sentinel Staff

In 1981, when Sylvia Young and several friends decided to begin a luxury limousine service in Central Florida, they thought they had come upon a can't-miss opportunity, what with all the tourists and conventions coming to town.

But it hasn't quite turned out that way. After four years, Young's company, Blue-Chip Limousine Service, is finally starting to eke out a profit. But it is capturing only a fraction of the tourist trade that Young had hoped for when the company plunked down $75,000 for a stretch Cadillac limousine.

Instead, the company has relied on carrying mourners to funerals, high school students to proms, and, occasionally, big-name entertainers to concert gigs.

''It's a difficult business,'' Young said. ''The glamor is there because of the vehicles involved, but it is a very difficult business to make money in.'' It's difficult to say who's making money in the limousine business, because virtually all of the companies are private businesses, which keep that kind of information under wraps. But it's plainly evident that it's a tough business to be in because of the number of operators in the market. There are about 40 such companies in Central Florida, competing in a market in which exclusive contracts at major tourist centers are the norm.

Young said it hasn't really helped to go the extra mile. In addition to the everyday opulence that most stretch limousines provide -- color televisions, wet bars and in-car intercom systems -- her company has offered extra touches in its service, such as uniformed and white-gloved drivers, fresh-cut flowers and champagne to attract clients.

''They tell you that if you build a better mouse-trap, everybody will beat a path to your door,'' Young said. ''We've had a few people knocking, but it hasn't been near what we thought it would be.''

Rachel Maldon, owner of Town and Country Transportation Services Inc., which has five limousines in addition to a 14-car taxi fleet, echoes Young's comments.

''Whatever you have, someone else wants,'' she said, ''and they'll undercut your rates or do anything else to get it.''

In addition to the competition, it is not an inexpensive business to get into either. A stretch limousine can cost anywhere between $40,000 and $75,000. Depending on how much the owner puts down for the car, the monthly loan payments can run between $1,200 and $2,000 a month, Maldon said.

Insurance costs are another big factor. Most companies carry liability insurance for at least $1 million. Maldon said that costs her $90,000 a year. With that kind of investment, most companies have to have their limousines rented out for a minimum period every day to make a profit. At Blue-Chip, which has varying rates starting at $65 a hour, Young said she strives to have her vehicles on the road at least 10 hours a day. Maldon said it takes renting her limos for at least eight hours a day to make a profit.

''Sometimes, however, you're happy to get just two airport runs a day,'' she said.

Combined with the large number of companies in the business is the fact that opportunities to carry tourists in Central Florida are limited. Most of the major tourist centers are locked into exclusive contracts with a limited number of companies.

Orlando International Airport, for example, has contracts with only two companies: Airport Limousine Service of Orlando Inc., owned by Orlando taxi magnate Paul Mears Jr., and Beeline Tours Inc., a new company owned by three investors who moved here three months ago from New York and started the company when they won the airport contract.

Those two companies are the only ones permitted to pick up arriving passengers at the airport's baggage-claim level, said airport spokeswoman Carolyn Fennell.

Airport Limousine, which holds the primary contract, will pay the airport authority $786,000 through 1988 for the limousine contract; Beeline, which owns the contract reserved for minority-owned companies, will pay $205,001 through 1988, Fennell said.

Other companies are permitted to make prearrangements to pick up passengers, but only at the airport's ground level. All of the limousine services are permitted to drop off passengers at the airport's top level.

Although the two companies own the limousine contract at the airport, they don't neccesarily provide luxury stretch limousines in every case. The airport's definition of limousine service requires only that companies charge unmetered rates and that passengers are carried on prearranged trips. Also, to avoid competition with the airport's bus companies, the limousine services can carry no more than 17 passengers.